Federal Legislation Would Enable Some Rural Residents to Afford Energy Efficiency Improvements

The Rural Energy Savings Program Act

(S. 3102 / H.R. 4785)

On March 10, 2010, the Rural Energy Savings Program Act was introduced in Congress. The bill was introduced in both the House and the Senate with bipartisan support.

Under the new program proposed by the bill, the US Department of Agriculture’s Rural Utilities Service (RUS) will create a $4.9 billion loan program available to cooperatives with a zero percent interest rate. Cooperatives in turn will make this money available to consumer members in the form of micro-loans with an interest rate of no more than 3 percent, which can be paid back primarily through savings on their electric bills. This type of loan program is called “on-bill financing” because the loan payments would be made right on the utility bill. Another key component is that the loan would stay with the real property (i.e. the electric meter) rather than with the utility customer.

Bipartisan co-sponsors of the Senate version of the bill (S. 3102) include Senators Jeff Merkley (D-OR), Lindsey Graham (R-SC), Richard Lugar (R-IN), Jeanne Shaheen (D-NH), Tim Johnson (D-SD), and Michael Bennett (D-CO).

A companion bill in the House of Representatives (H.R. 4785), was introduced by Representatives James Clyburn (D-SC), Tom Perriello (D-VA), Ed Whitfield (R-KY), and John Spratt (D-SC).

The National Rural Electric Cooperative Association is supporting the two bills, and you can find more information on their website.

Why this bill is important and its implications for Appalachia

An important step to achieving a clean and economically viable future for rural electric cooperatives, their member-customers, and their local economies will be the establishment of “on-bill financing” programs which will help overcome the up-front costs of implementing energy efficiency and weatherization measures.

Federal and state policies that make possible on-bill financing for the energy efficiency and weatherization portion of the alternative are important steps toward a clean energy future for rural co-ops and their members. Passage of the Rural Energy Savings Program Act is integral to this future, and the jobs and positive economic impact it will bring.